Use weakness in lithium stocks as an opportunity. While many top lithium stocks took a dive in recent weeks, it’s a temporary setback. After all, with lithium demand expected to explode about eight times over by 2040, finding new lithium deposits has become a top priority.
Further, supply still can’t keep up with demand as global leaders clamor for millions of electric vehicles. So, use the recent weakness as an opportunity in this sector. Let’s explore three top, oversold lithium stocks to buy.
Albemarle (ALB)
No list of lithium stocks is complete without the 800 lb. gorilla, Albemarle (NYSE:ALB).
After rocketing from about $80 in 2021 to a high of $318.45 in 2022, it recently plunged to about $162.63. Not only is it now oversold at double bottom support dating back to mid-2021, it’s also overextended on relative strength, MACD, and Williams’ %R. In fact, each time ALB gets this over-extended on those three indicators, it bounces back.
Albemarle, which yields about 1%, just partnered with Caterpillar (NYSE:CAT). They will “establish Kings Mountain, North Carolina, as the first-ever zero-emissions lithium mine site in North America. These efforts include utilization of next-generation, battery-powered mining equipment,” as noted by Mining.com. If successful, the mine could initially support the production of about 1.2 million electric vehicles a year.
In addition, the company was just awarded a $90 million critical materials award from the U.S. Department of Defense to boost lithium production in the U.S.
Piedmont Lithium (PLL)
Just like Albemarle, Piedmont Lithium (NASDAQ:PLL) is excessively oversold and overextended on the same technical indicators.
Currently, the company is working on two manufacturing plants in Tennessee and North Carolina to help meet U.S. lithium demand needs. Better, the company may be able to produce about 60,000 metric tons of supply which could contribute to about a third of planned capacity, as noted by Seeking Alpha.
Near term, it would be interesting to see if the $37.33 stock could retest its prior high of about $64. Long term, if all works out well with its two facilities, we may be looking at multi-bagger, ALB-type returns with Piedmont. Down but not out, put it on your buy screen.
Sigma Lithium (SGML)
Looking at $3.6 billion Sigma Lithium (NASDAQ:SGML), it’s just as oversold and overextended as the two above. Also, SGML has been trading sideways since the year began.
But with positive catalysts ahead, it could break higher. Initially, I’d like to see SGML test $42.50 again from its current price of $32.86. Longer term, I’d like to see it closer to $50.
Recently, the company has been receiving multiple acquisition proposals.
“The companies and the project have attracted interest from potential strategic partners, including global industry leaders in the energy, auto, batteries and lithium refining industries,” according to the company.
In addition, it just shipped 22,500 tons of battery-grade, lithium to Vitoria Port to be sent to Glencore. This is part of an agreement with Glencore (OTCMKTS:GLNCY) to build a global lithium supply chain for electric vehicles.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
